Rethinking China's Role in India's FDI Strategies

Economist Sajjid Chinoy advocates a policy shift regarding Chinese FDI in India, suggesting investment could yield more benefits than imposing tariffs on imports. Amid growing trade deficit and market challenges, he emphasizes the need for increased domestic demand and investment in innovation and human capital development.

Economist Sajjid Chinoy has raised concerns regarding India's current restrictions on foreign direct investments (FDI) from China. Speaking at an Asia Society event, Chinoy argued that embracing Chinese investments could offer more advantages than continuing to impose tariffs on Chinese imports.

As the chief India economist at J P Morgan and an advisor to the Prime Minister, Chinoy highlighted how the flood of cheaper Chinese imports creates challenges for emerging markets like India. He pointed out the widening trade deficit with China and emphasized the need for increased domestic demand visibility and investment in research and development.

Chinoy's comments come amid discussions on potentially revising the restrictive FDI policy introduced during the Covid-19 pandemic. He also stressed the importance of investing in human capital amidst the rise of artificial intelligence, advocating for enhanced education and skill development.

(With inputs from agencies.)